UAE pushes for mergers to beat downturn

Al Mansouri says government remains optimistic as it has deciphered 90% of the crisis.

Abu Dhabi: The UAE Government would favour mergers of real estate and financial institutions to create better synergies in the current economic situation, a top government official said.

"We are looking favourably to the merger of real estate and financial companies within the UAE as it would create better synergies," Sultan Bin Saeed Al Mansouri, UAE Minister of Economy, told delegates at a conference in Abu Dhabi on Monday.

His comments come at a time when the country's two biggest mortgage lenders - Amlak and Tamweel - are in the process of a merger, while Emirates Bank and National Bank of Dubai have already merged to create the region's biggest lender.

There is talk of more consolidation in the industry as the global economic slowdown has begun to bite into large UAE corporations.

Al Mansouri said there were signs that the real estate and financial sectors were consolidating, which was a positive development.

"This creates a positive impact in the market," he said.

Al Mansouri said the UAE government remained optimistic about the future as it has been able to decipher 90 per cent of the cause of the global financial crisis.

The UAE government is also hoping the inflation will drop to five per cent given the current state of the global economy, Al Mansouri said.

"However, liquidity and the price of oil may negatively or positively affect economic data," he told reporters on the sidelines of the Abu Dhabi Economic Forum.